Tuesday, February 2, 2010

Sony Pictures Entertainment is slashing its workforce by 6 1/2 percent, the studio said Monday. The studio began notifying the roughly 450 people who will be affected by the layoffs, with most being done by the first week in March.

Dear Colleagues,In our article in The SPE Reel in December, wespoke about the shifting landscape of entertainment and its impact on theeconomic model at the heart of this industry. Despite the records our studio setat the box office, we’re not immune from these forces, and we said then thatcosts needed to be controlled as part of a sustained and strategic effort toremake Sony Pictures for the future.

Since that time, in all-hands meetingsand small groups, our division heads and executive team have been in touch withmany of you to talk in more detail about the transformation of the studio andthe kinds of changes being considered.Last week, the first steps towardsthe creation of a new operating model for our studio were taken in our homeentertainment division and the IT department.Today, we want to let youknow, in a timely manner, what will be involved in the crucial – and difficult-- next phase of this process.In several stages, we will have a workforcereduction, with most of the notifications taking place by the first week inMarch. It will affect each of the studio’s divisions, with the majorityoccurring in home entertainment and IT, and in the United States.We do nothave final numbers or specific dates for all reductions now, because decisionsregarding proposals for certain international offices are pending. Local lawswill be governing a consultation process with employees in those locations.The decision to take this step was difficult. But it’s being done in thecontext of a strategy designed to help us safeguard our competitiveness andchart our own course through these troubled waters.The need is clear: fromthe growth of online piracy, to the social media effect on the performance offilms, to the way people have changed how they watch television and acquireDVDs. The business is going through a rough period of trial and transition, andwe have an obligation to take the steps necessary to get through it.As wesaid in December, we are grateful to everyone at Sony Pictures for helping usmeet the challenges of this time in our history from a position of strength. Andwe are confident that the changes we’re making, as difficult as they are, willkeep us on a path toward greater success in the future.